Foreign Acquisitions of U.S. Companies.

There has been a significant increase in foreign direct investment FDI in the United States. The United States has traditionally pursued an open door policy towards FDI. However, there is a growing congressional fear that foreign acquisitions are sometimes motivated by a desire to obtain technology, and sometimes result in the takeover of technologies considered critical to national security. There has been loss of U.S. high technology industries whose research and development could have an impact on national defense. In support of the tightening of technology controls, especially in licensing of firms selling dual-use items, the Pentagon and the CIA released reports about illegal transfers and dramatic interceptions of controlled national security technologies. Cases of diversion included very high speed integrated circuits, sonar devices, nuclear triggers, and long-range cannon tubing. This paper locks into the background of foreign acquisitions, the Exon-Florio amendment which empowers the President to deny a foreign takeover, and the loss of U.S. industries.